Considerations before taking out car insurance

Considerations before taking out car insurance

Protecting your vehicle in the long term is one of those expenses that seems to justify itself. After all, there's nothing more unpredictable than other drivers, and taking your financial future into your own hands is a great way to avoid getting into trouble in the long term. Regardless of whether the accident is your fault or another party's, being able to protect your own interests should be one of the first things you investigate when buying a new vehicle.

However, it can be hard to know what you should include in your insurance policy. There are so many different factors to consider, you'd be forgiven for feeling a little out of your depth. Before committing to any one plan, here are some common considerations to think about when looking into car insurance.

Uninsured Drivers

In most Australian states, having car insurance is a legal requirement. However, the off chance of some individuals not having it is still high. Therefore, if you're involved in a car accident that is their fault, don't think that absolves you from having adequate cover. If they aren't insured or don't have an adequate insurance policy, you could still find yourself out of pocket.

Therefore, it's best to discuss your needs with an insurance provider and figure out a product that allows you to feel safe and protected, even in these situations. It's better to pay a slightly higher premium on your insurance if it means you're able to afford replacing your car on the off chance it gets written off and the responsible party doesn't have insurance.

Major Accidents

Another thing to consider are the worst case scenarios. While the probability of these occurring are low, it's better to take them to heart and prepare properly for off chance that you could completely total your car. For example, if you happen to crash on an icy road and ruin your car, having an insurance policy that can cover this will save you a number of headaches in the long run.

Furthermore, if the vehicle is destroyed by elements outside of your control, you'll have to rely on your insurance policy to bail you out and replace the car. Therefore, it's a good idea to take these conditions to heart and work towards creating a solid insurance policy.

The quality of your vehicle

The age of your vehicle will also play a part in your overall policy. For example, older vehicles are more likely to break down in the future, simply due to the degradation experienced over time. However, you could find the overall premium you pay is lower due to the relative inexpensiveness of replacing such a vehicle. Furthermore, it's often a good idea to take out towing coverage for older vehicles, just in case you need to have the vehicle moved in the future.

On the flip side of this, while a newer car is anticipated to go without breaking down for quite some time, the premium on these vehicles is often higher and can be a larger expense than an older car. While there are less expenses (no towing coverage, for example), the newness of the car will play into the policy premiums.

Driving Experience

Finally, insurance companies will take the age and experience of the main vehicle owner into account as well. Simply put, younger drivers will have higher premiums due to their inexperience behind the wheel, as will people who have a history of driving mistakes.

The availability of defensive driving courses could be worth investigating, in order to get that extra bit of experience behind the wheel, which could translate into a more lenient insurance premium.

Image credit: NRMA Motoring and Services

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